Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. HOUSEKEEPING MANAGEMENT SECOND EDITION ︳ MATT A. CASADO

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. CHAPTER Main Concepts 4 Management of Inventory and Equipment Classification of Material Capital Expenditure Budgets Operating Budgets Purchasing Housekeeping Material Inventory Control Workout of Monthly Cost Percentages Cost of Supplies per Occupied Room

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. CLASSIFICATION OF MATERIAL The classification of material is a prerequisite to the process of controlling the large number of items used in the housekeeping department. Housekeeping material is divided into fixed assets and operating assets.

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. FIXED ASSETS Fixed assets are depreciated at the end of the fiscal year. Fixed assets are subcategorized into: – Furniture, Fixtures, & Equipment (FF&E) – Software – Department Equipment

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. OPERATING ASSETS Operating assets are not depreciated. Operating assets are under the control of the executive housekeeper. Operating assets are inventoried regularly. Operating assets are usually categorized into: – Cleaning supplies – Guest supplies – Linens – Uniforms

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. CAPITAL EXPENDITURE BUDGET A budget used to record the fixed assets needed for the upcoming fiscal year. The capital expenditure budget consists of a list of FF&E, software, and department equipment items required by the housekeeping department.

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. OPERATING BUDGETS Operating budgets have a direct relationship to the day- to-day revenue resulting from selling guestrooms. The housekeeping operating budget is part of the rooms division operating budget, which includes both the front office and housekeeping department. The operating budget usually includes the following housekeeping categories: – Salaries and wages – Payroll taxes and benefits – Other expenses

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. PURCHASING HOUSEKEEPING MATERIAL The executive housekeeper should pre-test and approve all items purchased for the housekeeping department. The process of buying material should involve finding the best product, price, and service. Buyers should understand how to conduct value analyses. The executive housekeeper is ultimately responsible for the cost and results of what is purchased.

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. SAMPLE SHOPPING FORM CE _QUALITY VENDOR 1SERVICE VENDOR 2 VENDOR 3 Type QU ALI TY VENDOR 1SERVICE VENDOR 2 VENDOR 3

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. INVENTORY CONTROL To account for the cost of housekeeping operating assets used, physical inventories are conducted regularly. The purpose of taking physical inventories is to find out what amounts of items are on hand and to work out its current market price. The cost of items used are expensed against the revenue produced for the same period of time. The percentages obtained are then compared to the amounts budgeted.

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. FORMULA FOR COST OF MONTHLY INVENTORY USED Beginning inventory on 3/1$15,800 Purchases for the month 2,900 + Physical inventory on 3/31 11,740 - Cost of inventory used in March 6,960

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. WORKOUT OF MONTHLY COST PERCENTAGE Divide the cost of inventory used by the room revenue generated in the same period of time. 6,960 =.012 or 1.2% 600,000

Copyright © 2012 by John Wiley & Sons, Inc. All Rights Reserved. COST OF SUPPLIES PER OCCUPIED ROOM An alternative method of controlling the cost of housekeeping department supplies used in a certain period of time. The cost is obtained by dividing each expense category by the number of rooms sold.